Contrary to the title, I tend to stay clear of calling my independent business a “freelance” business. Often I think many associate the term with a part-time or secondary job, while I personally feel that the term takes away from the amount of work involved making it seem less like a business… or maybe it’s just me being my over-thinking self.

With my first year of independency almost under the old belt, I’ve learned a lot about running an independent design business through mistakes of which I adjusted accordingly throughout the last ten and a half months.

Below are 16 common mistakes and misconceptions when running your own independent [design] business.

1- Working with set pricing

Let’s face it: Time is money and I first made the mistake of not charging hourly when starting off. I used to estimate the amount of time by the nature / medium / complexity / etcetera of a project and ask for 50% of a set project cost up-front (more on this below) and the remaining 50% at the end.

While I still provide my clients with an estimate up-front (how much I think it will cost), I make sure that they know (and is listed in the contract) this is only an estimate. Honestly, there is never any way to know how long a project will take and we all know good design takes time. Plain and simple, charge hourly while providing a round-a-bout estimate.

2- Working without contracts

Believe it or not, I’ve received many emails from new designers running their own small business asking if contracts are essential. The answer: Yes! No matter how large or small the company you are working for is, always, always, always, work under contracts — and make sure you cover all your ends (more on this below)!

I’ve received some negative feedback from other designers stating that my contract—around 21 pages—is too long and might scare clients away. My take: If a client is unwilling to read through the contract that protects myself as well as them, than their business isn’t important enough to them… and why would anyone want to work under those conditions?

Also, working with contracts allows you and your clients to know exactly what to expect and you can refer back to it throughout the project if things start to go sideways.

3- Not asking for 50% upfront

Asking for 50% of the estimated project quote upfront is a must in my opinion. It ensures that the client is serious about working with you, covers initial overheads and costs, as well as covers (most of) the time and expenses if the client decides to “run.”

If it’s a very large project I will do payments in thirds: 33% upfront, 33% mid-way and the remaining at the end before deliverables are handed over.

4- “Freelancing” is a walk in the park

Sure, running your own business is a great feeling, but make no mistake, it’s no walk in the park. Motivating yourself can be one of the hardest things to do and working on your own is definitely not for everyone.

I remember the day I decided to go full-time into my own business and immediately a close friend of mine said: “I wish I could do that; that way I could sleep until 12pm everyday!” Sure you could, but let’s face it, you won’t be successful that way.

Freelancing is a 24/7 job. When I’m not designing Monday through Friday from 9–5, I am blogging, marketing, responding to emails, looking for new inspiration, etc. I’ve even taken a short conference call at 7:30pm on a Friday night while out to dinner with friends.

5- Not standing up for your work

I find many designers make the mistake of always saying “yes” to everything their client says/asks. I understand that design, being a derivative of an “artform” will always be subjective to likes and dislikes, but that doesn’t mean you should give into everything a client suggests or states—especially when you know their suggestion is not the best solution.

Instead, try offering them advice and help them to understand “why”. Be the designer and the teacher. One of the first reasons I started this site was to not only help other designers, but to also help educate clients.

Here’s a short email from a client that initially turned down a proposal, but overall was impressed with how I explained things and later came back to work with me:

“You were my number one choice and I want to compliment you on your communication, organization, and professionalism. Your success is well earned and I was very impressed by your business model and the information you provided online and through email.”

6- Under-estimating the power of word of mouth

Word of mouth is your number one marketing tool. Never under-estimate it. However, this does not just mean being a great designer and people will talk about you. I’ve had clients refer me based on the way I communicate all the way down to how I seem “friendly and myself on the telephone.”

Twitter is a great way to spread the word. As Gary V says: “Twitter is nothing more than word of mouth on steroids.” So true! Word-of-mouth on Twitter can do wonders for yourself and your business. Stop trying to “game it” and instead build relationships, trust and friendships. Interact.

7- Not including legal fees in your contract

This was a slightly newer element I’ve added to my contract that I’ve learned a few months ago: Make clients responsible for legal fees if action is required.

If you are a small business chances are you work with other small(er) businesses, hence having smaller budget prices. If you were to take action against a client that owes you $2,000 for a project that they have not yet paid in full for, chances are it will cost you close to the same amount to hire a lawyer.

If you include this in your contracts, the client will be responsible for the money owed andthe fees it cost you to hire a lawyer. Always protect your interests.

8- Over-promising

Set realistic goals with your clients and make sure you meet them. Even though you are your own boss and don’t have someone higher up yelling at you to meet deadlines, doesn’t mean you can slack.

If you think a website redesign will take you 4 weeks, quote the client 5 or maybe even 6 weeks. You never know when something can just pop-up out of the blue, and if you finish the project in the 4 weeks it will the client even happier.

9- Thinking you don’t have to be a salesman

Another huge mistake when starting off that I quickly learned is that 60% of your job is being a salesman. You can be the best designer in the world, but not knowing how to sell or talk about your services will only hold you back.

Clients don’t always come to you. Sometimes you have to pitch to them instead.

10- Showing work that you don’t want to do

This is another mistake I made when first starting out; showing work in my portfolio that wasn’t work I wanted to do all the time.

Clients often choose to work with a designer based on his/her portfolio. If they like what they see they will usually follow up and expect the same quality and sometimes style. If you dislike doing logo design, than do not show logos in your portfolio. Doing work you are not fond of will also dull your portfolio, as it will lack the same quality of what you are passionate about.

11- Competing with your peers and not working with them

Many companies, both large and small, feel the need to compete. While this might work to an extent, I’ve found that being a small business the more I engage the people that do the same thing as me the more it improves my work and business. Your peers can teach you many things, especially those that have more experience than the current level you’re at. Embrace those people.

Many wonder how aiming a blog mostly towards other designers, brings clients to it. It does because I learn from those around me (and on Twitter and blog comments) and I share my experiences and passion through my writing. Clients also learn from this.

12- Not sticking to your passion

There was a time when I was a “dabbler”. I would try to be the “best” in everything (i.e: design, front-end development, back-end development, etc.) but I’ve quickly learned that my passion lies in design and that I should let others do what they are most passionate and best in.

Overall it not only makes your work better in the end, but you will also have happier clients and enjoy your line of work much more.

13- Not raising rates every year

Towards the end of last year I received an email from a client asking for my hourly rates, which I provided them at the time. However they decided to hold off for another 3 months, which took us into early January of 2010 by the time they reached out again. However, my rates were slightly increased due to a number of reasons, but mainly because we all should increase our rates each year. With every new year we gain more knowledge and experience.

14- Not saving info

There has been many times early on when I would receive an email from a client asking if I could work with them, however after talking further they or I either denied the work at a specific time for many different reasons (on vacation, too much work, work beyond knowledge…).

The mistake I made was not to store their contact information for future reference. Even if you do not work with someone at a specific time does not mean that you will never work with them. Include them in your holiday e-mail blast!

15- Thinking communication doesn’t matter

Many freelancers enjoy hiding behind their computer screens out of view from clients. As this might be true, it doesn’t mean we can slack on our communication methods. Actually it’s the opposite. Since many of my clients I never meet face-to-face I have to increase my methods of communication: faster email responses, Skype and phone conversations that explain things in terms clients understand, etc.

The better you communicate, the better relationship you will build and the more a client will say “yes” and refer you.

16- Under-pricing

I left this one for last as I feel it is the biggest mistake everyone makes at least once: under pricing your services. Many times we lower our prices to meet a client budget or just to take on work at a slow time. This is bad. Stand up for your prices and knowledge.

Again, this goes into selling your work and helping your clients see the real, true value in what good design provides. Effective design has no price tag. Don’t be afraid to tell your clients that they should hold off for another few months until they can build a slightly larger budget for their project. Trust me they will thank you in the end. Too many times I’ve had clients come to me saying someone just designed my website 6 months ago for a cheap price but I’m now incredibly unhappy with the results.

What are some mistakes and misconceptions you faced when starting out?

Great tips. I especially liked the tip about including the responsibility of legal fees in the contract. Too many times designers won’t pursue a non-paying client simply because it’s not worth it in the end after paying the legal fees.

Great list though I think you’ve misspelled a few words in your last sentence. I assume “by” should be “my” and “not” should be “now”. It doesn’t make sense how it currently reads. Otherwise, top notch!

This is an excellent resource! A lot of the times, even in articles showcasing tips and mistakes, it’s not this thorough. Some of this is stuff that I’ve never thought of and it’s almost vital to keep it in mind in the future. Thanks for this (and the many links within it)!

Jacque,
The legal fees is key. Something that I more recently implemented as well after getting my contract validated by a lawyer. Something that I’d also suggest.

Alan,
Keep working hard towards full-time. I worked at Apple for nearly 3+ years while building up my business and very happy I did so… even though it was a lot of time working “after-hours” in the midst of a full-time job at Apple.

Part of #15 is simply letting your clients know when it’s OK to get in touch with you, and what kind of off hours/emergency support you can give (for what additional cost). Managing expectations means letting your clients know exactly how long they will wait after sending an email before getting a reply.

If you’ve told your clients you’ll answer calls between 9am and 5pm, then make sure to do it, but be clear and consistent about how you handle after-hours calls.

I don’t agree with charging hourly. You limited yourself on the amount you can make (you can’t chrge $300 an hour) and you mess yourself over when you get faster at why you do (or you have to lie and pad your hours). I know websites take me X amount of hours to code, but I charge $xxxx amount of money and end up making anywhere from $100-$400 after trackig hours. However, clients are happier bc they know the exact amount they’re going to be charged.

The book “marketing and pricing for designers” and the blog men with pens also go into great detail of why you shouldn’t charge hourly.

Agreed, this is an excellent post, and helps calm a lot of my fears about freelancing (just started as a designer at the beginning of the year, having changed direction from being an agency account guy since ’03). Thanks B-Hoff! =)

The tip about making the client responsible for legal fees is definitely a great point, but I do wonder if it’d scare clients off. It could be a good litmus test as to whether they’re serious about working with you, though.

Even though I’ve been a solopreneur for quite some time, these are really great reminders of things even I forget to do — like raise rates yearly.
I especially appreciate No. 7 “Not including legal fees in your contract.”
Thankfully, I have never had to take a client to court for non-payment, but if I did, I would want to have that noted in my contract. Note to self: Update your contract form to include legal fees.

Thanks Brian!
I particularly enjoyed your thoughts about being up front and HONEST with clients on their suggested design ideas and/or not standing up for your work. While I think it is definitely easier said than done, I think this is an important part of being a design professional and having others view you as such. After all, isn’t that what our clients have hired us for? You wouldn’t tell a mechanic how to fix your car.

Like your blog a lot, but have to completely disagree with a few points…

1. I only charge hourly for consulting time. For design I charge project fees that reflect the ‘Value’ of what is being created. Creating a system based on time does not benefit a fast designer. By charging a per project fee with a set timeline and additional fees if milestones are not met helps to get projects completed smoothly and avoids the annoyance of repeatedly raising the budget.

2. 21 pages… are you crazy? A contract needs to 1st, outline what is being created in detail, 2nd, include all parties key info, and lastly basic legal coverage for copyright, payment terms, non-disclosure terms, changes, indemnification, yes, legal fees, and a kill clause.
I started out 10 years ago with the Graphic Artists Guild’s 9 page contract and have paired it down to 1 (one) page of legalese, and I’m surprised if clients even read that.
In reality if you end up getting sued, or suing a client, those extraneous 20 pages of legal sludge will have little effect on the outcome. You will almost always reach arbitration first, where almost all original agreements are tossed out the window and the legal counsel pushes the parties into reaching a settled compromise. A waste of ink and paper.
I’m happy to share my one pager if anyone likes… it has served me for almost a decade with companies of all sizes and made it through their legal departments.

Lastly, the most important part of the contract is a detailed breakdown with timeline of what will be created. Not.. 1. Website, 2. Business Card..

On a large project I will have 1 contract page for project/client info, 1 page for elements to be created, 1 page for detailed timeline, 1 page for technical specifics (as needed), then the last 1 page of legal terms & signatures. That’s the biggest it gets.

An otherwise well written and helpful post. In time you’ll all discover that all of these things are what’s considered to be ‘Best Practices’ and they will just become a part of your professional process (I hope).

Thanks for this – very insightful. Your first tip I completely agree with – I’ve been losing so much money doing flat rate quotes. And by “so much money”, I mean little bits over many jobs that add up to a lot in the end. I have a few clients I charge hourly as they always have little jobs for me – it’s great to get paid every dollar you deserve. In fact, I’m going into Billings right now to change my heading from “Quote” to “Estimate”…

Melo,
Thanks glad to hear you like the blog. In response to your points:
1. I think you missed the idea of what I was saying in charging hourly. I do come to an “estimated” quote for my clients, which I stated above. However, I let them know that this is a quote and that the price can increase based on “outside of scope” changes based on my hourly rate of $XX.XX. Many of times I think designers only charge a set price and do not state that the price is an estimate and get hit with extra hours and weeks of changes without it being compensated for.
2. I disagree on having a thorough legal document. It is the clients choice is they want to read it before signing, but in order to protect my business I feel more comfortable with a well-thoughtout document — also one that is checked and verified by a lawyer. If you are dealing with $20,000 website designs why wouldn’t you want all your ends covered legally? That would be a big hit to take if someone were to bail last minute with only the 50% upfront.

@Amber
The problem with a fixed price is then the client might feel the need to “milk” the price for all it’s worth – like people who gorge at a buffet and bring tupperware.

Clients do understandably like seeing a fixed number so they know what you’re getting into, but that’s where an *estimate* comes into play.

Did you note the tip about asking for 50% up front? That’s after you hand over an estimate.

Also, as you work more quickly, you raise your hourly rate. Brian covered that, too.

Fixed fees are dangerous. Hourly fees plus an estimate solves both worlds. On the bonus, a signed estimate from the client including proposed hours means you can increase billings if the project goes over due to client issues – you can’t do that with a fixed project fee.

And, yes, you can charge $300 an hour. I always charge a base-minimum of 10 hours (structured like a retainer). If a project takes you only 1-hour, the client is still charged $XXX amount. I do that because I’m in charge of my own accounting, communications, and management, and I’m not doing all that for an hour of work.

Hourly vs. fixed rate is an old debate and from my experience (10+years of it) I’ve found that hourly rate pricing limits my earning potential in its relation to a client’s perception.

I sell a creative product with a value. Contrary to popular approach, I see my creativity and knowledge as my most valuable asset, not necessarily ‘time’. I may consult with a client for an hour @ $250/hour, but the insight I provide is worth much, much more.

It all one in the same. I’m really talking about perception and how fees are presented to a client to make them easier to digest.

And to address Sharlene’s ‘milking’ comment… they will negotiate regardless of your method. I’ve worked in some of the largest agencies and learned there how flawed the ‘billable time’ system really is. I actually find it very unethical in many instances and find it ‘undervalues’ the elements being created.

Mostly, tracking time is a pain in the ass and seldom accurate. My creative brain starts turning the moment a client mentions a conecpt and it doesn’t turn off based on the clock.

Lastly, Brian… trust me, your extra 20 pages of legal terms will provide you little more real-world protection than my one pager. I’ve been through the legal process with the Director’s Guild of Canada providing my legal counsel. In 14 months of legal proceedings, the ‘extended legalese’ of the disputed contract did not enter the equation… the $ did. At no time did either party dissect the 18th page of legal terms… they negotiated a settlement. Period.

The best transition I’ve made recently (and have as yet to purge my site of code and other related things) is to ditch the idea of being a freelancer. It’s a liability, not an asset. It’s worked for a LONG time, but times have changed. Freelancing is now what you do in-between actually designing and marketing :)

Twitter et al have not helped those who were a little complacent in their markets and now have to move a lot faster and work harder for their clients than they had to in the past. And they have to do it for less money. Simple economics. The smartest thing to do is charge a pro rate, be designer not a freelancer, find a niche or two, and work hard.

Learn a new skill too. I’ve gotten into iPhone development (“font combos”) and released my first app just couple weeks back. It feels like learning to do web development all over again. Or like getting rid of tables for div based layouts. That was HARD! But now their is residual streams of revenue coming in though the work is done. Now I just need 20 apps :).

Or start your own crowd source logo company factory thingee to rope-a-dope all the “freelancers” in… :)

Man, what a great article. I loved. It’s not just for freelancers, but can work for some mid-level business too. For sure I’ll make this text reach my boss. I also wondering to start my own small home-office. Here in Brazil, things are not too good for small and mid-level agencies.

[...] Tweets 10 Sure-Fire Ways to Make Your Clients Love You | Design Shack 3 Tweets 16 Common Freelancing Mistakes and Misconceptions I’ve learned a lot about running an independent design business through mistakes of which I [...]

I’d like to chime in on the hourly vs. flat fee pricing argument. I’ve been an independent designer for 8 years and have always used flat-fee pricing. Like others have mentioned, if you are a very fast or efficient designer you can either bid flat rate, or try to charge $300/hour. Trying the latter is likely to turn away a lot of clients.

To avoid scope creep, I limit the number of revisions that I offer for the set fee (I offer three), and include in my terms that additional revisions will be billed hourly at $XXX per hour. If things are going well with a project, I won’t even enforce this unless the number of revisions gets out of hand. This further ingratiates me to my clients as they see me as going beyond what I promised.

Over the years, I’ve also become very good at knowing what clients expect to pay for certain things, regardless of how many hours it takes me to do them. Logo design is a good example. Almost every client I work with prefers this arrangement.

This is a great post, thank you! Sadly, as I was reading I noticed that I make a few of these errors, so it was really helpful to see what I shouldn’t do. I’m also thankful that I saw this at such an early age – I’m 14.

[...] Misconceptions. The Design Cubicle has become one of my favorite blogs with posts like this one on Common Freelancing Mistakes and Misconceptions. Still, I only agree with about half of the author’s advice here. Requiring a contract, for [...]

This is only the Legal page of my agreement. As with any contract or project you may alter the terms to fit your needs, however this covers the most common areas of concern in the most efficient of ways. You should also note that my Copyright assignment is unique (I give my clients full copyright usage [globally]) for most projects.

You may want to adjust the copyright granted based on each individual project.

Great sharing! I guess these mistakes are avoidable when trust and communication meets preparation. One misconception I have about freelancing is that you have more ‘free’ time to do stuff you want… and you might as well have guessed my greatest mistake: Not learning to manage time wisely.

Thank you for sharing your experience. I quite agree with you. I also have some comments to add.
It’s a good idea to charge hourly. But there are pros and cons. Clients always want to know how much they need to pay. And they are right. They want to know whether you meet their budget or not as well as compare your quote with other proposals. Just imagine that you come to an Auto Center to buy a car and wonder how much it costs. Will you be satisfied with such an answer: It depends on how many hours its manufacturing takes? I suppose, no. But at the other hand you may miscalculate the cost of a project not taking into account some unexpected extra work. It’s true.
I’ve found the solution. I calculate every hour expected to be spent for each part of work and give a customer a set price. However I also stipulate all work to be done and number of revisions as well as hourly rate for extra work. I think it’s the best way to meet everyone’s halfway.

Great post Brian. You raised some really interesting points that I think every designer could benefit from if they decide to branch out into their own business. I know that over the last couple of years that I’ve been building up my own business, I’ve found myself that many of your points here are extremely relevant (and theirs still others that I could improve on). Keep up the great work. Cheers!

Thanks for the post Brian. After seeing the last point you made I realized how I need to raise my price. It’s just hard as a beginner freelancer to get enough clients with such little exposure and a small portfolio to start charging enough to live comfortably. I’ve been getting by, but barely. Any tips?

Good article but I agree with most “fixed prices are better than hourly ones” aficionados. If you have too much work (like I do), you have to switch to fixed price because you can’t compress time or raise your hourly rate indefinitely. Take a break, judge the real value of your works, over estimate them a bit if needed and you’ll work for a fairly descent hourly rate without frightening your clients. Maybe they’ll even think you are cheap because you work fast!

About Brian Hoff: Designer, Writer and Speaker

I’m a graphic designer living in Brooklyn, New York who loves creating compelling and useful websites and memorable interactions across the web. When I’m not designing I can be found writing, speaking and occasionally part-time teaching at colleges — all on the subject of design. I started this blog to share my passion and experiences with designers and clients. I'm most active on Twitter; say hello: Follow @behoff